Correlation Between Ab Bond and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Nebraska Municipal at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ab Bond and Nebraska Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Nebraska Municipal Fund, you can compare the effects of market volatilities on Ab Bond and Nebraska Municipal and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ab Bond with a short position of Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Nebraska Municipal.
Diversification Opportunities for Ab Bond and Nebraska Municipal
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABNTX and Nebraska is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal and Ab Bond is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ab Bond Inflation are associated (or correlated) with Nebraska Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebraska Municipal has no effect on the direction of Ab Bond i.e., Ab Bond and Nebraska Municipal go up and down completely randomly.
Pair Corralation between Ab Bond and Nebraska Municipal
Assuming the 90 days horizon Ab Bond Inflation is expected to generate 1.11 times more return on investment than Nebraska Municipal. However, Ab Bond is 1.11 times more volatile than Nebraska Municipal Fund. It trades about 0.08 of its potential returns per unit of risk. Nebraska Municipal Fund is currently generating about 0.05 per unit of risk. If you would invest 942.00 in Ab Bond Inflation on September 2, 2024 and sell it today you would earn a total of 76.00 from holding Ab Bond Inflation or generate 8.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Nebraska Municipal Fund
Performance |
| Timeline |
| Ab Bond Inflation |
| Nebraska Municipal |
Ab Bond and Nebraska Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Nebraska Municipal
The main advantage of trading using opposite Ab Bond and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Nebraska Municipal can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nebraska Municipal will offset losses from the drop in Nebraska Municipal's long position.| Ab Bond vs. Global Gold Fund | Ab Bond vs. Goldman Sachs Esg | Ab Bond vs. Franklin Gold Precious | Ab Bond vs. Gabelli Gold Fund |
| Nebraska Municipal vs. Us Vector Equity | Nebraska Municipal vs. Scharf Fund Retail | Nebraska Municipal vs. Huber Capital Equity | Nebraska Municipal vs. Locorr Dynamic Equity |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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